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Facts
The assessee appealed an ex-parte order from the NFAC for AY 2017-18, which arose from an assessment order passed under Section 147 r.w.s. 144B. The original assessment order involved significant additions including disallowed interest, additions for income declared under IDS 2016 but not taxed, and an addition for the unexplained source of immovable property. The assessee failed to appear before the lower authorities, leading to ex-parte orders.
Held
The Tribunal noted that the assessee failed to appear before the lower authorities, resulting in ex-parte orders. However, considering that appeals for similar issues from other assessment years are pending and the possibility of duplicate additions, the Tribunal deemed it appropriate to remit the matter back to the CIT(A) for fresh adjudication after providing the assessee with a reasonable opportunity of hearing.
Key Issues
Whether the lower authorities erred in passing ex-parte orders without providing sufficient opportunity for hearing, and if the additions made are sustainable on merits, especially concerning the treatment of IDS declarations and interest payments.
Sections Cited
147, 144B, 144, 148
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Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y. 2017-18 is directed against the order dated 28.02.2025 of National Faceless Appeal Centre (NFAC), Delhi arising out of Assessment Order dated 29.05.2023 passed u/s.147 r.w.s.144B of the Income-tax Act, 1961 (hereinafter also called ‘the Act’).
Assessee has raised following grounds of appeal :
1. On the facts and the circumstances of the case and in law, lower authorities erred in passing ex-parte order and erred in deciding the issue only on the basis of material available with them, this action is being violative of principal of natural justice. Your appellant prays for granting opportunity of hearing before lower authorities. Without prejudice to the above grounds of appeal, following grounds are also taken on merit,
2. On the facts and in the circumstances of the case and in law a learned Assessing Officer erred in Disallowing the entire interest paid a sum of Rs.5,07,75,898 by treating the loan as utilized for non-business purpose by disregarding appellants detailed submission, and also by ignoring the fact that appellant has debited this interest to Profit and Loss A/c which resulted in loss and loss was not allowed to be carry forward, therefore Learned Assessing Officer action of treating the entire interest paid as income of assesse is incorrect.
3. On the facts and in the circumstances of the case and in law a learned Assessing Officer erred making addition of Rs. 72,16,49,949 on account of declaration made under IDS 2016, especially in view of fact that declaration was made year wise and already such additions are made in the respective years assessment order passed and therefore making the same additions will amount to double additions.
4. On the facts and in the circumstances of the case and in law a learned Assessing Officer erred in making an addition of Rs. 2,77,94,811 as unexplained source for purchase of immovable property by ignoring assessee's submission and supporting evidences entire additions needs to be deleted.
5. On the facts and in the circumstances of the case and in law a learned Assessing Officer erred in not allowing the set off of loss to the extent of Rs.28,82,698 as claimed by the appellant in the return of income fled in response to notice under section 148, Appellant prays that if appellant fails on any of the ground raised above he may be allowed to claim set off this loss. Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice.”
3. At the outset, Ld. Counsel for the assessee submitted that the major amount of additions made by Assessing Officer (AO) includes addition on account of income declared under Income Declaration Scheme (IDS), 2016 but not offered to tax. He also submitted that impugned order is an exparte order as the assessee failed to file necessary details and on most of the dates of hearing assessee has sought adjournment. Even on the final date of notice dated 28.02.2025, assessee again sought adjournment but did not furnish any submissions or evidence in support of its grounds. As a result of such non-compliance by the assessee, ld.CIT(A) concluded the assessment on the basis of information available on record and affirmed the order of the AO.
He further submitted that similar type of additions on account of not offering of declaration under IDS, 2016 have been made for the other assessment years also and there are certain additions which are duplicate in nature. Reference was drawn to the details filed during the course of hearing which reads as under :
“The appeal in above referred case has arisen out of order u/s 250 dated 28/02/2025, by Ld. CIT(A)/NFAC, this appeal involves a core issue of addition on account of declaration made under Income Declaration Scheme, 2016 and especially the respective additions are also made in the relevant assessment years for which declaration was made and appeals for those years are pending before NFAC. We have made submission with respect to those appeals from AY 2011- 12 onwards and orders are awaited which will have consequences in this year's appeal. We enclose herewith a chart stating details of appeals pending before NFAC:
Sr.No. AY Appeal No. 1 2011-12 CIT(A), Pune-4/10509/2018-19 2 2012-13 CIT(A), Pune-4/10517/2018-19 3 2013-14 CIT(A), Pune-4/10520/2018-19 4 2016-17 NFAC/2015-16/10277279 5 2017-18 CIT(A), Pune-4/10774/2019-20 6 2019-20 NFAC/2018-19/10363863 7 2020-21 NFAC/2019-20/10483622
In view of this your appellant prays for restoring the matter back to the file of Ld.CIT(A) and oblige.”
Accordingly, a request was made by the assessee to set aside the issues to the file of CIT(A) for necessary adjudication along with other appeals which are still pending before CIT(A). On the other hand, ld. Departmental Representative did not oppose this request.
We have heard the rival contentions and perused the record placed before us. We notice that assessee who is an individual did not file the return of income for A.Y. 2017-18 and the assessment u/s.144 of the Act was finalized on 29.12.2019 at a total income of Rs.1,01,58,000/-. As per the information, assessee declared income of Rs.72,16,49,949/- under IDS, 2016 but did not pay tax. Further during the course of investigation, it was found that assessee has deposited cash of Rs.1,01,48,000/- in the current account at Karad Urban Coop. Bank Ltd. For carrying out the re-assessment proceedings, valid notice u/s.148 of the Act have been issued and duly served upon the assessee and valid re-reassessment proceedings have been carried out by the AO. However, assessee failed to make any compliance to the various notices of hearing and ld. AO concluded the assessment assessing income at Rs.81,03,78,658/- in the following manner :
Sl.No. Description Amount (in INR) 1. Income as per Return of Income filed Nil 2. Income as per assessment order passed 1,01,58,000 u/s.144 dated 29.12.2019 3. Variation in respect to (i) Disallowance of Interest payment 5,07,75,898/- (ii) Addition on account of declaration 72,16,49,949/- made under IDS, 2016 (iii) Addition on account of unexplained 2,77,94,811/- source for purchase of immovable property TOTAL ASSESSED INCOME Rs.81,03,78,658/-
Assessee challenged all the additions made by AO before CIT(A) but the assessee failed to appear before Ld.CIT(A). Assessee sought adjournment but did not file any details in support of its grounds of appeal. As a result, ld.CIT(A) had no option except to confirm the action of the AO. Further, in the addition made by ld. AO, major amount pertain to the additions on account of declaration made under IDS, 2016 but not offered to tax and therefore added in the hands of assessee. Before us, ld. Counsel for the assessee has furnished details of other assessment years where the appeals are pending before ld.CIT(A) and one of the common issue for all those years falling in the period A.Yrs. 2011-12 to 2020-21 are the additions made for income declared under IDS, 2016 but not offered to tax and they are still pending for adjudication. Considering the fact that in the instant appeal also ld.CIT(A) has passed exparte order solely for the non-compliance on the part of assessee but then since other years having similar issue are pending for adjudication before the First Appellate Authority and it is also claimed that duplicate additions have been made for the very same amount in some years, we considering the prayer of the assessee and there being no objection raised by the ld. DR deem it appropriate to remit back all the issues raised in the instant appeal to the file of ld.CIT(A) for necessary adjudication along with other appeals pending before ld.CIT(A) as detailed above and carry out adjudication in accordance with law after providing reasonable opportunity of hearing to the assessee. Grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 23rd day of June, 2025.